Financial Business Recap: Citigroup Takes A CHARGE, Jefferies RESCUES Knight Capital
Here are Tuesday’s top stories:
NYSE Euronext (NYSE:NYX) is currently in talks with the Securities and Exchange Commission over allegations that it violated a rule which bans exchanges from disseminating data on a private data feed faster than on public feeds. The former does not expect that any resolution will be material. The discussions emerged as the SEC steps up its inquiry on the effects of high-speed trading on markets, for which these information feeds are all important.
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Analysts believe that Citigroup Inc. (NYSE:C) might take a charge of between $3.2 billion and $6 billion on a writedown of its Smith Barney joint venture with Morgan Stanley (NYSE:MS). The lower estimate is from Portales Partners and the higher one comes from Barclays. Meanwhile, Citigroup and Morgan Stanley have recruited Perella Weinberg to calculate the value of a 14 percent investment in the joint venture that Citigroup is divesting to Morgan Stanley.
It turns out that Jefferies Group Inc. (NYSE:JEF) Chief Executive Richard Handler and Executive-Committee Chairman Brian Friedman played the lead roles in rescuing Knight Capital Group, Inc. (NYSE:KCG) subsequent to its erroneous trades of last week. The two individuals provided funds on Friday that allowed Knight to remain viable, according to the Wall Street Journal. In addition, Jefferies aided with the structuring of Knight’s $400 million lifeline on Monday, of which the former is supplying about 25 percent.
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